Lloyd's List: October 15, 2004

GCL looks for new challenge in West Africa

VARIETY is the spice of life. For Global Container Line, variety is life. And having used this variety to prove itself as “a master of all trades” in East Africa, GCL has now set its eyes on West Africa as the next logical step of its evolution, writes Rajesh Joshi.
 “We expect to have about 40 ships within a year, based on the goal of expanding into West African liner trades,” says GCL vice president Bijan Paksima. He adds that the company already has a significant tramp presence in West Africa, largely hauling Indian exports and aid cargoes to the region. GCL’s stress on variety partly comes from necessity. The company primarily operates multipurpose lo-ro ships, which lend themselves to creative cargo contortions that are typical in exotic East African harbours and their chaotic Indian and Pakistani counterparts. “We do not limit ourselves by being only a pure boxship, ro-ro or breakbulk operator,“ Bijan says. “Our competitive advantage is our flexibility and the ability to carry all cargoes in one ship. Hence our motto, ‘We do it all’.
” GCL benefits from calling at less-frequented ports which larger companies may not always visit. This allows GCL to often provide container space for players such as CP Ships, Delmas and P&O Nedlloyd. But there is a crucial difference: GCL’s local knowledge and personal relationships with clients around the Indian Ocean, which western shipping superpowers unfailingly trumpet but do not always get right. The rest is down to pure ingenuity. GCL knows precisely how to load out and cube out the ship to optimise deadweight and space. A combination of steel rolls and cotton bales, for instance, can fill the ship out in both categories. The result is that when global giants come in with their fancy little boxships — with the unsaid intention of unseating GCL — the latter quietly loads up with stuff the boxships can never dream of accommodating, and sails off on another profitable voyage.
A typical Indian Ocean liner voyage commences in Dubai, where a multipurpose lo-ro ship sails off with 500-600 high-end goods containers, 300-400 vehicles and some project cargo such as generators or transformers. Part of it is discharged in Dar es Salaam. The ship is re-loaded here with agricultural goods such as peas and pulses. GCL tonnage has the ability to take this cargo breakbulk or boxed. Cleverly, this choice depends on the prevailing rate. Right now, for instance, breakbulk is not in the mix. The next stop is Mombassa, where the remaining containers and cars are offloaded and containers with tea crates taken on. The ship then calls in Karachi, where the tea comes off and is replaced with bagged rice. Onwards to Mumbai, where Indian vehicle exports to East Africa, containers and project cargoes roll on. The whole loop back through to Muscat and beyond takes about four weeks, Bijan says. The trick, he says, is to balance each leg of the journey against the next, but to also ensure the right cargo mix.
 In Karachi, for instance, there may be enough rice to fill the whole ship. But will leaving space for the Indian trucks mean more revenue for GCL? The Indian Ocean operation has five ships dedicated to it and comprises 30%-35% of GCL’s business, Bijan says. GCL’s other major business involves South Africa. Two dedicated lo-ro ships operate a liner service between Dar es Salaam, Durban and Mozambique. An offshoot is the small feeder service linking Mombassa with the Indian Ocean islands of Comoros, Madagascar and Mauritius.
These two services comprise about 30% of GCL business, with the remainder coming from tramp and project cargoes. An unusual element in the latter category involves aid shipments. Intimate knowledge of Africa — which is where some of the aid goes — and an ability as well as a need to fill out its ships has engendered this trade. GCL is the largest foreign-flag food aid carrier in the US. By law, 75% of US-funded food aid has to sail on US tonnage. There is no advantage offered per se for US-domiciled owners who offer foreign tonnage.
This has not prevented GCL from getting some high-profile jobs. In March 2003, the US Agency for International Development asked the company to supply a ship overnight to transport the first US-funded food shipment into Iraq. Bijan says he stayed up all night to find the 1984-built, 39,365 dwt, Marshall Islands-flag Free Atlas, which became one of two ships to arrive into Umm Qasr in May with grain loaded at the Archer Daniels Midland facility in Texas.The ship was a media star. “We just could not have fallen on our face in such a case,” Bijan says. “Still, USAID hired us precisely because they were confident we would perform.”

Lloyd's List: October 15, 2004